Maybe we should say 'thanks' to U.S.

Laws may boost our domestic meat industry

Recent developments in the ongoing meat-labelling dispute between Canada and the U.S. would suggest Canada's biggest trading partner has no intention of abiding by World Trade Organization rules.

The mandatory country-of-origin labelling laws in the United States, known as mCOOL, have been ruled out of line by the international trade-dispute-settlement body, with the U.S. now required to make changes by May 23 or face the prospect of retaliatory measures from both Canada and Mexico.

The mCOOL requires beef, pork and other meats sold in U.S. retail stores to be labelled with the country where the animal was born. What it means is U.S. feedlots that buy cattle from Canada and meat packers processing those cattle must keep everything separate.

It's a non-tariff trade barrier in the classic sense. The WTO says forcing imported livestock and meats to be labelled as to their origin is discriminatory.

And it has been expensive.

Since its imposition in 2008, mCOOL is estimated to have cost Canadian cattle and hog producers over $1 billion annually in lower prices and lost sales.

It's been particularly hard on Manitoba as the largest pork exporter in the country.

Manitoba Pork Council executive director Andrew Dickson told the recent Manitoba Swine Seminar that in 2012, the province exported just over three million weanlings and about 400,000 live slaughter hogs to the U.S. That's down from 5.5 million weanlings and 1.2 million market hogs exported in 2007.

Live cattle exports haven't dropped much at all, but the value of those exports because of the increased costs is down by between $25 and $40 a head, or about $150 million annually.

Outrage grew on the northern side of the border as details emerged in recent weeks over how the U.S. intends to "comply" with the WTO ruling.

The proposed changes further define the labelling provisions to identify where the animal was born, but they still require different labels for animals born in the U.S. and those born elsewhere.

"The proposed modified COOL rule will increase the level of discrimination against imported livestock and prolong the already lengthy WTO dispute," the Canadian Pork Council says.

Rules are rules and the Canadians are indignant their largest export market is so flagrantly flouting them.

But here's the thing. If you buy underwear in the U.S., there's a label on it telling you where it was made. Consumer proponents of these laws question why the same shouldn't apply to what people put into their mouths.

You also have to wonder why Canada is so hell-bent on exporting the value-added end of its livestock industry.

The ultimate irony of this whole affair is Canada is now threatening to slap retaliatory duties on U.S. beef and pork imported by Canada. As a major producer and exporter of these products, why are we buying beef and pork from the U.S. in the first place?

The Canadian Agricultural Policy Institute published a report last year on Canada's declining beef industry that flagged Canada's reliance on the U.S. for 85 per cent of its beef and cattle exports as a major threat to the industry's future.

Why? Because the value of beef exports to other counties -- the other 15 per cent -- often exceeds the value of Canada's exports to the U.S.

"The unit value of Canada's exports to the U.S. is only 60 per cent of U.S. imports to Canada," the CAPI report says. "Are we missing a bigger economic opportunity to better serve our own domestic market, (i.e. increased and further processing)?"

Canada supplies about 75 per cent of its own market's beef. That number has fallen from 87 per cent in 2005 as U.S. imports have risen.

The Canadian Cattlemen's Association estimates there are 10,000 American jobs at stake if Canada goes forward with retaliatory measures on U.S. meat imports. You have to wonder where those jobs would go?

Instead of fighting Washington on this one, perhaps Canada should be sending delegations to say thank you, thank you very much.

Laura Rance is editor of the Manitoba Co-operator. She can be reached at 204-792-4382 or by email: laura@fbcpublishing.com.

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